25/11/2019
IMPORTANT DISCLAIMER
The information of this report is of a general nature only. It is not a personal financial advice. It does not take into account your objectives, financial situation and personal needs.
a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.
EURUSD
EURUSD started the week with a bullish trend, reaching the area of 1.11 (weekly high was at 1.1096) but from last Wednesday and on, there was a strong downtrend which was stronger on Friday where we had the biggest weekly drop and the price of the pair approached 1.10 (weekly low at 1.1013) and finally closed at 1.1020. This was exactly our prediction for the pair in our last week’s report. There were two major topics that dominated the markets last week and we expect to do so in the current week as well. The USA – China trade war seems to appear signs of exhaustion since the positive outlook for a deal that has been developed the last weeks does not have the expected follow-ups, especially after the latest Congress bill regarding protests in Hong Kong that made China nervous and upset. On the other hand, even if the latest growth news from Eurozone seem good enough, there are certain concerns for the last quarter of 2019 and the new ECB President Christine Lagarde’s speech did not change the EUR outlook. EURUSD may continue moving between 1.10 and 1.11, waiting for fresh fuel for taking a specific trend or it will break 1.10 (which seems the most likely scenario) and the we should expect prices close to 1.09. This price area will be the main target of our sell positions this week.
There are a lot of news and announcements for US and European economies this week as well. Next Thursday is a public holiday in USA (Thanksgiving Day) and next Friday is a Black Friday day. On Monday there’s the announcement of IFO Institute regarding the expectation and the business sentiment in Germany, on Tuesday there is the important speech of FED’s Jerome Powell, the Advance Goods Trade Balance for and the Consumer Confidence Index for USA, on Wednesday there’s a series of announcements for US economy including the GDP, the Durable Goods Orders, the Core PCE (Personal Consumption Expenditure) and the Initial Jobless Claims, on Thursday we have the announcement of the Eurozone Consumer Confidence and the German Consumer Price Index and finally on Friday there is the announcement of the German Unemployment Rate and the US Chicago Purchasing Managers’ Index.
GBPUSD
A clearly bearish week for GBPUSD passed by. The pair after approaching 1.30 on last Monday (weekly high at 1.2985), started to drop by reaching the 1.28 area (weekly low at 1.2822) and finally closed at 1.2834. It is obvious that for the moment the pair has not the necessary strength to break the channel of prices between 1.28 and 1.30 since Brexit news are not too good in order to send it above 1.30 but in the same time Brexit news are not disappointing in order to have a 1.28 bearish breakout. Boris Johnson keeps on leading the polls with a 2-digit distance but in the recent debate with Jeremy Corbyn, he did not make the difference (on the contrary, media said that Corbyn was the debate’s winner) and this was the major cause for GBP drop last week. The most possible scenario is to see the pair moving into the channel 1.28 -1.30 this week too and by keeping in mind that currently the price is closer to 1.28, we expect movements close and above 1.29 which will be the target for our buy positions this week.
Besides the US news that we saw at EURUSD section, this week is also important for the English economy from the Wednesday and on. On Wednesday there’s the Inflation announcement and on Friday we have the Consumer Confidence Index GfK while in the same day there is a variety of announcements such as the Mortgage Approvals, the Consumer Credit and the Money Supply.
USDJPY
A small drop for USDJPY last week which was along with even a lower volatility. The price moved between 108.27 and 109.06 and most of the days it was stuck at the area of 108.50 – 108.60. The stagnation in the USA – China trade war deal has a result of rewarding the JPY buyers against USD. Having in mind that this will be a relaxed week for USA since this Thursday is the Thanksgiving Day and this Friday is the Black Friday, we expect a further volatility decrease to the end of the current week. The long-term uptrend of the pair does not seem to get affected seriously and we’ll favor buy positions this week with 1st target the price area of 109.25 and above this resistance, the area of 110.
Very busy week regarding the Japanese economy this week and most likely will affect the trend and the volatility of the pair. Early this Monday the Leading Economic Index was announced with the results slightly lower than the expectations (there are already pressures on JPY), while on Wednesday there’s the speech of Makoto Sakurai (Bank of Japan), on Thursday there are announcements regarding Retail Sales and Direct Investments in Japanese Bonds & Stocks and finally on Friday there are important announcements such as Producer Price Index, Unemployment Rate and the Industrial Production.
EURJPY
Bearish was last week for EURJPY which opened above 120, at 120.20 and closed at 119.72 while during the week we saw prices from 120.68 to 119.65. The volatility also keeps on decreasing but there is no such an uncertainty and concerns in the global markets that justify a strong JPY which is considered to be a safe-haven asset. Keeping under consideration that the price area of 119.60 – 119.70 is a support for the pair, we’ll bet on buy positions, waiting for prices above 120 again.
News & announcements regarding European and UK economies are mentioned at the sections of EURUSD and GBPUSD accordingly.
EURGBP
EURGBP had a bullish reaction after three bearish weeks in a row, trying to exceed 0.86 (it reached up to 0.8605 last week) and it finally closed very near from this area, at 0.8586. On this movement, the most critical factor was GBP who had serious pressures due to Brexit and due to the weak appearance of Boris Johnson in last week’s debate. In the current season, EUR is weak due to the weak Eurozone economic results that are expected for the ending of 2019 and a possible stability in Brexit’s issues may cause an approach of EURGBP to the area of which will be the main target of our sell positions for the current week.
News & announcements regarding European and UK economies are mentioned at the sections of EURUSD and GBPUSD accordingly.
USDCAD
Another strongly bullish week passed by for USDCAD, which managed to breakout 1.33 with a weekly high at 1.3327 and a weekly close at 1.33, proving one more time that whole numbers in the financial markets are always strong supports and resistances. The price area of 1.3320 is also a strong resistance for the pair which has started an uptrend rally from the end of October and the price area of 1.3050. If we see a 1.3320 breakout, then maybe we should see USDCAD close to 1.35 but as long as it does not happen it’s possible to see the prices of the pair returning back to1 .3170 (target for our sell positions this week). From an improvement of the relationships between USA and China, both of the USA and Canada economies are benefit while an important reason for CAD is always the oil prices.
As per Canada and the Canadian economy, news and announcements that along with US ones will affect the pair, include the Current Account Balance on Thursday and the Industrial Production along with Canadian GDP for Q3 on Friday.
USDCHF
USDCHF had the expected attitude last week. The price stayed into the channel 0.9830 – 0.9970 and since it was close to the lower band of the channel and below 0.99, the bullish reaction to the upper band of the channel was expected and finally confirmed. The pair climbed up to 0.9979 and closed at 0.9972, exactly on the channel’s upper band. Now the big bet is if the price will stay into this channel or if the 1:1 breakout time has come. Such buy positions are very risky because 1:1 is a very strong resistance since the last May. A possible breakout will open the road for prices close to 1.02 but we prefer the channel option this week too, so our strategy will be range trading to the limit bands of the channel.
The Swiss economy is expected to have a more active role to the trend & volatility of the pair this week, especially after next Wednesday where the ZEW Survey for the Swiss economy expectations is announced. Also on Thursday there is the Swiss GDP announcement and on Friday we have the announcement of KOF Index (Konjunkturforschungsstelle).
AUDUSD
AUDUSD had a 3rd in a row bearish week since it opened at 0.6812 and closed at 0.6783 while the weekly low was at 0.6780. Stuck progress on USA – China trade war in combination with the problems of Australia and China economies, press AUD and now we expect a reaction mostly from Australia regarding the monetary policy and the rates. AUDUSD below 0.68 starts to try 10-year lows and it takes a lot of attention since there may be bullish reactions above 0.68. It is a week that we will prefer to stay out from trading AUDUSD.
The major role for this week will have the speeches of Guy Debelle in Canberra and Philip Lowe in Sidney this Tuesday while on Thursday we have the Australian Private Capital Expenditure for Q3. From China, there are no important news or announcements this week.
SP500
SP500 had an important slowdown last week with losses of 0.16%, after severe profits for seven weeks in a row. It is pretty obvious that after a rally like this, there will be a weariness and a profit taking of the short-term traders & investors. The weekly close above 3,100 points though, at 3,112 points, still leaves doors open for a further bullish movement but again we need to underline that these price levels are unknown the for the index since we’re very close to all times highs. As long as the price is above 3,100 points, the uptrend momentum does not seem to get affected and if we also keep in mind that the bullish movements are gentler than the bearish ones, maybe SP500 is able to reach 3,130 points. On the contrary, a possible bearish breakout of 3,100 points is likely the beginning of a serious correction for SP500 and the first important support below these levels is the price area of 3,020 points which will be the main target for our short positions this week.
DAX30
As we had expected, the German Index DAX30, after the rising slowdown, had a drop last week of 0.3%. Weekly close was at 13,193 points, just 37 points below the weekly open but during the week the volatility was higher and the price moved between 13,043 and 13,378 points. DAX30 reacted when the price approached 13,000 points last Thursday and this fact shows that the uptrend is still alive. From one side the 13,000 considered to be a very strong support but on the other side the fundamentals of Germany and Europe do not justify a financial & stocks markets rally. Having this in mind, maybe we’ll see the Index above 13.000 points this week but not above 13,400 points so range trading between these levels will be our major strategy this week, unless there will be a certain breakout (to any direction) and then we’ll follow it.
FTSE100
Profits close to 0.5% had the British Index FTSE100 last week even if during the week we had many fluctuations and alternates of positive and negative days. Weekly close was at 7,339 points but we saw lows at 7,196 points and highs at 7,404 points. Most likely, this week the Index will try again the 7,400 points while the major fundamentals have to do mostly with Brexit and the upcoming UK elections in December. Boris Johnson is considered to be a carrier of strong possibilities for a deal Brexit and as long as he and his party lead the polls, the markets would react in a positive manner. The price area of 7,400 points is the main target for our long positions this week.
Gold
Slightly bearish was last week for gold with losses circa 0.34% and a weekly close at $1,462. There were bullish reactions in the beginning of the week that brought gold close to $1,479 but last Thursday and Friday we had price corrections that brought back the yellow metal at the area of $1,460. The big drop that gold had in the beginning of the current month does not seem to have serious and continuous reactions from buyers and a further drop to the area of $1,440 looks very possible that’s why we select short positions this week with this price area as a target. Also, catalyst for the gold prices will be the news & updates from USA – China trade war since it is the most dominating topic of these days and more or less the risk mood of the markets is affected by it a lot.
US Oil
Quite erratic was last week for oil and its prices. US oil had strong bearish trends the first two days of the week and the price was pushed below $55 but after last Wednesday, a bullish rally took place and as a result we saw the prices of oil above $58 ($58.67 was the weekly high) and finally we had a correction during last Friday and a weekly close at $57.83, just 0.09% below the weekly open. The growth and the expand of the world economies do not justify high oil prices and the attempt of returning back to the zone of $50 – $55 makes perfect sense but the latest news from media and especially from Reuters state that the OPEC countries (in view of the meeting in the beginning of December) maybe will have a production cut expand in the mid 2020 without mentioning a further cut though. News from tariffs and the relationship between USA and China, along with news from Hong Kong protests news will also affect seriously oil prices this week. We will prefer short positions, targeting $56.40
Bitcoin
Btitcoin is in a free fall status and last week closed below $7,000, at $6,908 while we saw prices even close to $6,785! It was the fourth and stronger bearish week in a row for the most important crypto in the world and now the question is if there’s a break to this drop and in what price area it would be. Technically speaking, there’s a strong support at the area of $6,100 – $6.200 but cryptos many times break supports very easily. The percentage weekly loss was close to 19%! There are no obvious reasons for this situation, except maybe some speculative movements and some rumours for more disciplinarian regulatory forms for cryptos, especially from China. We keep on being Bitcoin sellers and $6,200 is our main target.
